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General News Reliance Jio testing cable TV STB
MUMBAI: After shaking up the telecom market, Mukesh Ambani-controlled Reliance Jio is working on its cable TV venture that would not only offer video but also broadband services.

“Testing of cable TV set-top box (STB) is currently on. It is a hybrid box,” an industry source familiar with the development said.

The STB is of Korean make, but other vendors could come into play, the source added. The test run of the box has started almost two months back.

Some boxes are installed at the houses of the employees of Reliance Industries Ltd (RIL) in Jamnagar, the source said.

So, when will Reliance Jio enter the cable TV sector? It was in mid-2015 that Reliance Jio Media, a subsidiary of Reliance Jio Infocomm, procured a pan-India MSO (multi-system operator) licence from the Ministry of Information & Broadcasting (MIB).

There is no hurry and the priority right now is to settle down in the mobility sector. Though Jio boasts 108.9 million subscribers until 31 March, the battle is far from being over. An analyst pointed out that in many cases customers of telecom majors like Vodafone and Airtel have not migrated out but taken Jio as an additional service operator.

Will a late entry into the cable TV sector spoil Reliance’s chances? “The timing is not so crucial as the cable TV market even after digitisation would still be vulnerable for disruption. It would be available for a new player who has capital. It does not matter if the deadline for digital addressable system (DAS) is over. The swapping of STBs for free is not a costly proposition for Reliance,” a media analyst said.

The Telecom Regulatory Authority of India’s (TRAI) new tariff order will also suit Reliance’s entry into the cable TV sector. As per the new order, distribution platform operators (DPOs) like MSOs will get content from broadcasters as a pass-through cost. Broadcasters will have to price their channels at a retail level. The tariff order is currently contested by Star India and Vijay Television at the Madras High Court and the hearing is on 12 June. Star has also moved the Supreme Court.

It is not clear whether Reliance would take the acquisition route of MSOs or adopt the direct approach. The company is in any case rolling out fibre-to-the-home (FTTH) network, but this would take a long time to connect to the customer premises.

For obtaining the last mile, Reliance Jio could tap the local cable operators (LCOs). They could be either acquired or brought into the fold through a revenue-share arrangement.

Reliance is also known to destroy the market capital of rival companies when it announces its arrival in a sector, the analyst said. “We have seen that in the telecom sector. If it takes an aggressive pricing route, we could see that in the cable TV sector too. That depends on the strategy that they take. If they are tapping the LCOs, then the market cap of the listed cable TV companies could fall. But if they decide to acquire the MSOs, then we could see the share price go up,” he added.

It is still not clear whether Reliance would start the cable TV business from the Phase III and IV towns and then target the larger cities.

The cable TV business, however, is a lot more complex. The LCOs are an important part of the business as they control the last mile. After digitisation, the national MSOs have expanded and chalked out a market share. For Reliance, the main issue will be to have access to the last mile. How they handle the LCO issue will be interesting to watch.

In parallel, Reliance Jio is planning to provide FTTH broadband service and has started beta trials in a few locations. The company said that it would expand the scope of the beta trials over the next few months. The FTTH pilot is running in some cities including Delhi and Mumbai.

The FTTH service will be bundled with JioMedia share device, smart STB, routers and power line communication (PLC) devices. These will help Jio offer services such as HD TV and video-on-demand (VoD) and JioCloud.

Airtel Digital HD Recorder / Kerala Vision Digital TV
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